As a researcher with a background in blockchain technology and digital finance, I’ve come across many stories of individuals who have fallen victim to various risks associated with cryptocurrencies, including gambling addiction. Hoak’s confession of stealing and gambling away nearly $300,000 worth of user funds is particularly disheartening.
Hoak, a pseudonymous developer behind the Cypher Protocol, has admitted to misappropriating approximately $300,000 in user funds and using that money for gambling activities.
The lead developer for the Solana-built decentralized exchange that supports cross-margin transactions made a confession in a publicly released statement on May 14th via an X post.
“To address the elephant in the room, the allegations are true, I took the funds and gambled them away. I didn’t run away with it, nor did anyone else.”
Hoak’s admission came after Barrett_io, an anonymous key figure, disclosed on May 12th that there were no available funds, as mentioned in a previous post.
The post didn’t draw any attention until a Discord member, who remained anonymous, brought up their trouble with fund withdrawals. (Barrett reportedly stated)
“Hoak has stolen funds from the cypher redemption contract. This happened over months via 36 withdraws… Deployer wallet (ETR8…) withdraws funds from Cypher’s redemption contract. Then conducts swaps and sends SOL, USDC, and USDT to an intermediary wallet (7sKM…). This intermediary wallet then sends funds to Binance.”
Approximately $317,000 in total value of Solana (SOL), Tether USD (USDT), and USDC (USDC) was transferred from Hoak’s linked address to Binance, as indicated by the on-chain information gathered by Barrett.
On December 7, Hoak’s digital wallet reached a maximum value of approximately $68,365. However, prior to this, the wallet contained around $56,000 worth of digital assets as of April 22. According to CoinStats data, over 99% of these assets were subsequently transferred within just two days.
An insider’s recent actions dealt a heavy setback to Cypher Protocol in its attempt to bounce back. In August 2023, this decentralized exchange (DEX) suffered a cyberattack, resulting in the theft of more than $1 million in digital assets.
Is gambling addiction a growing issue in the crypto space?
As a crypto investor grappling with an uncontrollable gambling habit, I can’t defend my actions and understand that others may not be able to relate. However, I want to make it clear that my compulsion to gamble led me to commit those thefts.
“I am also in no way, shape, or form attempting to victimise myself, but this is the culmination of what snowballed into a crippling gambling addiction and probably multiple other psychological factors that went by unchecked for too long.”
As a researcher studying the cryptocurrency market, I’ve come across skeptics who argue that the industry is reminiscent of casinos due to its perceived lack of regulation and potential for speculative behavior. The U.S. Securities and Exchange Commission (SEC) Chairman, Gary Gensler, has made this comparison even more explicit, likening the crypto ecosystem to “Wild West casinos,” with stablecoins serving as the “poker chips” in this metaphor.
Based on a 2023 YouGgov study involving approximately 4,200 UK adults, individuals who engage in harmful gambling were about 5 times as probable as the average person to hold cryptocurrencies. Consequently, those adversely affected by crypto trading are more prone to experience negative repercussions from it.
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2024-05-15 11:58